Study Notes

Topical Examples of Price Discrimination

Level:
AS, A Level
Board:
AQA, Edexcel, OCR, IB

Last updated 21 Mar 2021

This study note curates recent examples of price discrimination in action. This is a pricing strategy used by the majority of businesses as a way of generating extra revenue, increasing profits and selling excess capacity in markets.

Jan 2016: The popular online fashion retail site Asos has decided to introduce zonal pricing – i.e. charging varied, more competitive, prices in different parts of the world

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Dec 2015: Nurofen was found guilty by an Australian court of misleading customers by selling the same painkillers at different prices.

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Dec 2015: A report from the New York Department of Consumer affairs discovers a huge number of examples of gender price discrimination for a variety of consumer products. One example quoted is that "Women, on average, paid 48 percent more for goods like shampoo, conditioner and gel. Razor cartridges came in second place, costing female shoppers 11 percent more."

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Dec 2015: More airlines decide to use online auctions using emails to existing customers to sell premium seats rather than giving them to loyal customers for free

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Dec 2015: The Harvard Business Review discusses Uber's surge pricing model and how to overcome the image problem that this pricing policy has. Everyone Hates Uber’s Surge Pricing – Here’s How to Fix It

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Nov 2015: Airbnb introduces a smart pricing model - Airbnb announced a pricing tool that will adjust to changing supply and demand conditions in a local area

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Oct 2015: WH Smith accused of price gouging – i.e. selling products such as bottled water for significantly higher prices in their hospital outlets than in nearby high street stores

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The Economics of Price Discrimination

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